South Africa will suffer "a complete economic collapse"
within four generations if it does nothing to combat the HIV/Aids epidemic,
according to new research from the World Bank.
The authors of the World Bank report claim the Aids epidemic could have
such a devastating impact on the economy that family incomes could fall
by more than a half and middle-income South Africa could become more like
a poor African nation.
They argue that the real economic threat from Aids is its potential to
kill young adults, which can destroy a country's ability to create human
"As things now stand, the economy could be on the brink of progressive
collapse," says the report, which was written by Clive Bell from the
World Bank and the University of Heidelberg, Hans Gersbach at Heidelberg
and Shanta Devarajan of the World Bank.
"If nothing is done to combat the epidemic, a complete economic collapse
will occur within four generations," the report concludes. The World
Bank plans to publish the report as a working paper.
These dramatic conclusions will increase pressure on the South African
government to launch a much more aggressive programme of Aids treatment
in the country, where around 15 per cent of adults are HIV-positive.
Although President Thabo Mbeki has backed away from his controversial suggestion
that HIV might not be the cause of Aids, his government is still coming
under heavy criticism from international health officials who view its
response so far as weak, despite some plaudits for its Aids prevention
Many macroeconomic analyses of the Aids epidemic have predicted a relatively
modest economic impact with a loss of gross domestic product per capita
of 1 per cent a year.
However, the World Bank report argues these analyses ignore the fact that
it is young adults who bear the brunt of Aids, unlike most other diseases,
which tend to hit children and the elderly.
As a result, the chain of transmission for passing knowledge to the young
would be broken and children would be less likely to go to school.
In turn, today's children would have a lower level of education to pass
on to their offspring, potentially creating a downward spiral in human
capital levels. Spending money now to keep infected parents alive, and
on caring for orphans, would have significant economic benefits, they said.
The authors stressed all forecasts in this area were highly speculative
but they said if nothing were done, family incomes could fall by more than
half by 2050.
Meanwhile, Nelson Mandela, the former president of South Africa, called
on Europe and Japan on Monday to give much more money to Aids
programmes, especially the UN-sponsored Global Fund for Fighting Aids,
Tuberculosis and Malaria.
He praised President George W. Bush for his plan to spend $15bn on Aids
over five years and noted France was committed to tripling its global fund
"It is time for other European countries to substantially increase
their contribution to the Global Fund," he said, speaking at an Aids
conference in Paris. Europe should at least match, if not exceed, the US
contribution. African countries would also watch closely to see that the
US followed through with its $15bn pledge.
Without mentioning South Africa, Mr Mandela said African nations had to
do "more, much more" to address Aids. He said Uganda, Senegal
and Botswana had set an example for the rest of the region.